How Blockchain Technology Can Transform E-Commerce Part 3

Absence of high fees and restrictive rules

Traditional e-commerce platforms can charge sellers in a number of ways. Some have monthly fees that allow access to the platform. Others may want a percentage of gross sales, and this percentage may be changing depending on the sales volume. Yet other may also be charging their merchants a per-sale fee. While the fees differ from platform to platform, they are typically very high and can be anywhere between 5% and 50% of the total price that a buyer pays for a product on the traditional platform.

Sellers sell their merchandise on such platforms to make a profit, which is why they add the fees by the platforms to the final price of their products. This means higher prices for buyers and lower margins for sellers. The only party that wins in this scenario is the e-commerce platform that serves as a third party between buyers and sellers.

In business, the most valuable asset an enterprise can have is loyal customers and a relationship with its loyal customers. If a business has customers that trust that business, like it and are willing to buy products and services from the business, the business can solve almost any problem because it can have cash flow from the customers. Sometimes, a business doesn’t even have to have a product first. For example, if customers like a restaurant, the restaurant can pre-sell dinner packages before customers even arrive at a restaurant. A company like Apple can pre-sell its products before they are available, but this only happens because customers like the company and trust the company. Nobody would give a company money if they didn’t think that the company would not deliver on its promise. Therefore, building a relationship with customers is one of the most important aspects of a business.

However, this is not something most traditional e-commerce platforms allow their sellers to do. The platforms view the customers that buy from the platforms as customers of the platforms, not customers of individual sellers. Because of this, sellers have very limited opportunity to interact with customers directly and to build relationships with the customers, which in the long run can hurt them significantly.

For example, as of the writing of this article, Amazon allows the sellers on the platform to send just one email asking for feedback and checking on the satisfaction of a buyer with the product that the buyer has bought. Amazon also has its own customer service and when Amazon visitors have questions or concerns, it is Amazon’s customer service that deals with these questions or concerns. Obviously, members of Amazon’s customer care team do not care about an individual product on the platform to the same degree that the actual seller of the product cares about it.

Traditional e-commerce platforms are very strict about enforcing the rules that they create. The sellers that do not play by the rules of the platforms and try to go around these rules typically find themselves banned from selling on the platforms, often without an explanation as to why a ban has occurred. In many cases, bans happen for a reason, but a platform can also make a mistake and there is nothing worse than getting banned without an explanation about the reasons for the ban. On a blockchain-based e-commerce marketplace, none of these problems would exist because of the direct contact between buyers and sellers. Sellers would be able to ask buyers to any kind of information they would like to get, including email and postal address so that they could not only send the goods but also check on the satisfaction of the customers and send them additional offers.

The prices of products on decentralized marketplaces would also be lower because there would be no third party charging the sellers up to 50% to trade.

Finally, a decentralized marketplace could have sets of rules that benefit both sellers and buyers. Members of the marketplace could vote on these rules and change them when necessary, so that the rules are transparent, known to every member of the platform and issues such as random bans of merchants without notice do not happen.